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MicroStrategy Raises $563M for Bitcoin Buying Spree

Coin WorldFriday, Jan 31, 2025 10:19 am ET

1min read

MicroStrategy Completes $563.4 Million Preferred Stock Offering, Intends to Use Some of the Proceeds to Acquire More Bitcoin

On January 31, MicroStrategy (MSTR) successfully finalized the issuance of 7.3 million shares of Series A Perpetual Exchangeable Preferred Stock (STRK) at an issue price of $80 per share. This transaction generated net proceeds totaling $563.4 million. The preferred stock is structured with a settlement price of $100 per share, alongside an 8% annual dividend rate that can be paid in either cash or Class A common stock, convertible into common stock at an initial conversion price of $1,000 per share. MicroStrategy emphasized that the capital raised will be directed toward general corporate commitments, which prominently include purchasing additional Bitcoin. Notably, should the liquidation value drop below 25% of the total issuance, the company reserves the right to redeem all shares. This transaction, underwritten by Barclays and Moelis & Company, is anticipated to reach final settlement by February 5, 2025.

MicroStrategy's initial attempt to expand its capital raising activities via perpetual preferred stock appeared to have been met with strong demand. The company more than doubled the $250 million it was looking to raise, selling 7.3 million shares of STRK at $80 each, and coming away with $563.4 million after expenses. The new pricing raises the dividend yield to 10% from an initially expected 8%, a move that's likely to increase investor demand. Funds will be used to acquire more bitcoin (BTC).

MicroStrategy's recently-announced perpetual convertible preferred stock offering has been oversubscribed by nearly 3 times the expected volume of 2.5 million shares. An automated alert sent out by Fidelity Investments on January 30, 2025 revealed that $STRK raised at least $584 million as against the expected $200 million, with a final offering size of 7.3 million shares priced at $80 each. The strong share offering performance extends the company's winning streak under the leadership of chairman Michael Saylor whose famously all-in approach to Bitcoin (BTC) investment has seen MicroStrategy amass $30.4 billion worth of Bitcoin since 2

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